THE BOTTOM LINE:
If a specific peril’s policy does not define theft, a court will use a broad definition that may ultimately allow coverage.
In a recent case, Peterson v. Homesite Indemnity Co., 287 Neb. 48 (Dec. 20, 2013), the Nebraska Supreme Court reviewed a standard coverage clause on theft. The policyholder had hired a moving company to transport his household goods to Florida. The cost of the move was based upon the weight of the shipment, which the owner and the mover had set at a certain amount before transport. The mover later claimed – without sufficient proof – that the shipment weighed more. The mover then demanded significantly more money, which the homeowner refused to pay.
When the mover retained the goods, the homeowner claimed that his household contents had been “stolen” by the mover. The homeowner filed a claim for theft under this homeowner’s policy, which his insurer denied. After suit was filed, the trial court granted the insurance company’s motion for summary judgment. The trial court found that the loss was due to a contractual dispute between the mover and the homeowner after the homeowner “voluntarily delivered” his property to the mover to ship to Florida.
The Nebraska Supreme Court reversed. If found that an insurance policy is a contract. The terms decide coverage. If a term is ambiguous, it should be construed in favor of the policyholder. In the homeowner’s policy, theft was a listed peril that was covered, but theft was not defined. The Supreme Court applied a broad definition of the word. It ruled that “theft” under an insurance policy – when it is not defined by the terms of the policy itself – shall mean “any loss of the insured’s personal property caused by an unlawful or wrongful taking with criminal intent.” Peterson, Slip op. at 5.
The Nebraska Supreme Court overturned the insurance company’s summary judgment. It remanded the case for a determination as to whether the mover’s actions met the definition set out above.